Innovative CIOs Show How to Make Money With IT
A select few CIOs are generating cold hard cash through innovation and collaboration. We rounded up examples of CIOs who generate revenue with IT, either by boosting sales or developing a product or service sold externally.
Fri, November 30, 2012
CIO — Advisor Group, a subsidiary of multinational insurance company AIG, was on the brink of being sold or disbanded five years ago because it was losing business. The broker-dealers and investment advisers who used the company's client-management tools and forms were not seeing enough value to convince them to stay--until IT stepped up to give them a reason.
"We spent a lot of time over the last couple years almost reinventing ourselves," says David Ballard, who was recently promoted from CIO to COO. By developing a one-stop online portal for all the services and processes that used to be scattered and paper-based, IT created a service that made advisers' daily work lives better. Now they are choosing Advisor Group in numbers the company hasn't seen in years. The adviser retention rate has grown steadily from 86 percent in 2009 to 98 percent in 2012.
Top-notch CIOs in various industries are creating new ways to pull in revenue at their companies. The techniques vary widely: Some use IT to boost showroom sales, or sell homegrown software to other companies. Others take the valuable data they produce in-house and turn it into a saleable information service.
These standout CIOs look beyond the company's walls and are viewed as full peers by the rest of the C-suite. They are at the top of what Ballard and other members of the CIO Executive Council, a global peer advisory service and professional association founded by CIO's publisher, call the Future-State CIO Journey. CIOs who make their way through the journey's framework begin with being seen as credible service providers, evolve to being influential and transformational business partners, and finally become strategic business peers who boost the bottom line.
The CIO position has always had the potential to generate revenue, says consultant Peter High, founder of Metis Strategy and author of World Class IT: Why Businesses Succeed When IT Triumphs. But he estimates that less than 25 percent of all CIOs have taken the leap to becoming revenue producers.
"It's the particularly clever CIOs who recognize this advantage and grab hold of it," he says. "It's not the average CIO by any stretch of the imagination."
There is no one path to becoming a revenue-generating CIO. Some CIOs are in the game from the start with the full backing of the CEO, the board and other power brokers in the company. Others must battle from behind to prove they should be there.